Blog

Creative tax policies to foster growth

A gist of the blog:

Hong Kong has all along been maintaining a low, simple and territorial-source-based tax regime, which comprises mainly of direct taxes. Our tax system has underpinned Hong Kong’s success for decades, and supported the fast growing of many local businesses.

The competitive advantages of our tax system have started to change in recent years. The international standards and requirements targeting profit shifting, tax base erosion, money laundering as well as tax evasion have been rising. At the same time, a number of economies have been introducing tax measures to attract investors and promote the development of selected industries. We have to be prepared for these changes and should be forward-looking and actively explore ways to ensure that our advantages would not be undermined.

I recently had brainstorming sessions with representatives of the accountancy sector and the business sector. We agreed that the three major targets of the Tax Policy Unit should be to ensure that our tax practices align with international standards, to make good use of tax policies to foster the development of Hong Kong’s economy and industries, and to explore broadening the tax base and increasing revenue. The first two should be the priorities of the Tax Policy Unit at present stage.

April 23, 2017